Official sources said that terrorists are believed to be holed up in the hotel adjacent to historic Amira Kadal bridge in Lal Chowk area.
The policeman, who was killed during the attack, has been identified as Mohammed Yusuf. He was posted as driver of the Station House Officer of Maisuma Police station.
According to official sources, three civilians, including Rauf, a cameraman of a Delhi-based private news channel, were also injured and have been rushed to a hospital.
As per the latest report, two of the four terrorists are said to have escaped in the ensuing commotion, while the remaining two are believed to be holed up in a nearby hotel.
A local militant outfit Jamiet-e-Mujahideen has claimed responsibility for the fidayeen attack.